Aussie mortgage holders urged to refinance

This as one in 10 is set to see the end of their fixed-rate home loan in the next three months

Aussie mortgage holders urged to refinance

Many Australian mortgage holders are set to feel the full impact of the past 10 rate hikes, with one in 10 to roll off their fixed rates in the next three months and 50.22% seeing their fixed rates expire by September, when the peak is set to hit, Aussie Home Loans said.

The broker network, part of Lendi Group, also warned that it’s not just those on fixed-rate mortgages who will feel the pinch. Homeowners on variable loans would also have to regularly monitor their current interest rates to avoid the ongoing impact of rate hikes.

The data comes as the cost of living continues to rise, with Aussie Home Loans recording a 28% decline in median net surplus income since the beginning of the year.

Faced with the mounting financial pressures, the mortgage broker is urging homeowners to consider refinancing. Over the past quarter, Aussie Home Loans has helped households to get a 0.68% reduction, many of them with their existing lender.

With current average home loan interest rates at 5.82%, refinancing could save a borrower with a $500,000 mortgage $202 a month, $2,354 a year, and $60.851 in a life of loan – just by revisiting their situation, not remaining loyal to their existing lender or rate, and taking action before their current rate ends. 

“Our team of experienced refinanceers understand the challenges that many households are facing in today’s economic climate,” said Brad Cramb (pictured above), Lendi Group CEO of distribution.

”Just as households review their daily budgets, utilities in order to save on their family’s bottom line, refinancing is just – if not more – important to regularly revisit. Your home loan interest rate should never be a set and forget option. It can be one of the most effective tools for homeowners to help reduce their financial burden and achieve greater financial stability.

“By refinancing their home loan, homeowners can potentially save money on their monthly repayments and free up cash for other expenses. This is especially important given we’ve also seen a 28% drop in median net surplus income since the beginning of the year.”

In addition to the looming end for fixed rate mortgages, data also showed that the maximum borrowing power median dropped by 11% (or more than $100,000) between January and September 2022. This meant more Australians could find themselves in mortgage prison as we head to September this year.

“Fixed-rate mortgage holders are likely to be some of the most vulnerable in this situation as they roll off their current rate, requiring added expertise to assist their financial situation,” Cramb said.

“Aussie Home Loans is committed to helping Australian households navigate their home loan finances during these challenging times. We believe that by encouraging homeowners to consider refinancing, we can help ease their financial pressures and provide greater financial security for families across the country.”

Some savvy Australians are already taking action, with nearly half of NSW mortgage holders refinancing since January, marking a total of $422.53 million. This was followed by 22.75% of Queenslanders and 19.5% of Victorians.

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